Ethiopian netherlands business event 56 november 2015, rijswijk, the netherlands. Ethiopias reform agenda is expected to support growth that is projected to be slightly below or above 8% in the near term. Ethiopias economy experienced strong, broadbased growth averaging 9. This process also encompasses the nurturing modern entrepreneurial skills in the private sector and fostering innovation. Simply providing more schooling may yield little or nothing in the way of economic growth in the absence of other elements such as the appropriate market and governmental institutions and suitable policy environment in the labor market and other sectors of the economy to support a functioning modern economy. Between 1996 and 2008, cereal yields, aided by significantly greater use of fertilizer, increased by about 40%. While a rising working age population will continue to support potential gdp growth, total factor productivity growth and investment are gradually expected to decline. The government aspires to an agricultureled industrialization and focuses its attention on food security, rural. In general the trend is to move away form a dominant public sector towards a financial structure where the role of the private sector is becoming increasingly important. When emporer haile selassie led ethiopia out of italian occupation, he promised much liberalisation, land reform, greater prosperity, a modern army, and a modern bureaucracy. The country has achieved a double digit growth rate in recent years 200510 and is set. Theoretically and empirically it has been tested that infrastructure affects economic growth either by reducing the cost of intermediate goods or through externality effect. Ethiopias economic system by ahnri walker on prezi. However, basic challenges such as unskilled labor, high transport costs.
This statistic shows the share of economic sectors in the gross domestic product gdp in ethiopia from 2008 to 2018. The past, present, and future of economic growth dani rodrik 1. Second, we checked effects of government investment, terms of trade, foreign. The fifth section looks into joint venture control. Command an economy in which investment, prices, and incomes are determined by central government. Productive capacity is defined broadly as the natural resource potential, accumulation of human capital and the institutions that facilitate inclusive and sustainable economic growth.
In the same way, after four years, that means in 2010, the country has achieved 10. Pdf regulation of merger under the ethiopian competition law. Causal relationship between government revenue growth and. Development and instability as ethiopia develops, its capital city, addis ababa is also set to expand, a. The structure and performance of ethiopias financial sector. Ethiopias new prime minister has promised to jumpstart serious economic reforms. Now the ethiopian government wants the country to achieve. Copies of this report are available to the public from. Key growth drivers in ethiopia real gdp per capita.
Other basic problems with currently known ethiopian coal resources are the high ash content and occasionally high sulphur content. This page provides ethiopia balance of trade actual values, historical data. National bank of ethiopia 1 201718 annual report governors note 1. The structure and performance of ethiopias financial. Over the last ten years, the country has achieved doubledigit growth in real terms, averaging 10. Using the aggregate production approach cobbdouglas production functions of gdp measurement, solow 1957 showed how factor accumulation and technological progress determine the path of. Professor flavien tchapga economics, university of versailles, france published an intriguing paper on developing effective competition policies in africa and on the inherent tension this effort faces. Balance of trade in ethiopia averaged 2350 usd million from 2006 until 2019, reaching an all time high of 956. Accordingly, investments on growth enhancing sectors such as infrastructure and social. Poverty defined as the number of people unable to attain the minimum living standard 3. Institutional and policy factors appear to have been the dominant influence, except in the years of drought. Agriculture and the economic transformation of ethiopia. The future of work for smallholder farmers in ethiopia government.
The share of the population living below the national poverty line decreased from 30% in 2011 to 24% in 2016. Pdf infrastructure development and economic growth in. Productive capacity and economic growth in ethiopia. Human capital and economic growth in ethiopia ethiopian. Much of the empirical evidence, but also the theoretical discourse suggest that both arguments in. The relationship between inflation, money supply and economic growth in ethiopia. Sdg8 decent work and economic growth is of high relevance, but. Ethiopia economy gdp, inflation, cpi and interest rate. Ethiopia economic outlook african development bank. It is the second most populous country in subsaharan africa. Ethiopian merger regulation pdf 498kb oxford law faculty. Apr 12, 2017 ethiopias national development plan ethiopias economic policy is guided by the second phase of the growth and transformation plan 201516 202021. The main objective of the study was to investigate the long run and short run impact of human capital on economic growth in ethiopia using real gdp per capita, as a proxy for economic growth over the period 19747520102011. Ethiopia gdp annual growth rate 19812018 data 20192020.
The country achieved an average annual growth rate of 9. The relationship between government revenue growth and economic growth is investigated for ethiopia during the period 1974752014. Ethiopia economic development the policy of the ethiopian government is to create the conditions necessary for sustained economic growth. Given the low level of crop yields relative to those of other countries with comparable resources, and relative to best farmers and experiment stations, a. With regard to the issue of accelerating the growth process, importance of industrialization is well recognized, which is invariably the outcome or accompaniment of economic. The economic outlook is positive, and real gdp growth is projected to stabilize at 7. Recent economic developments the ethiopian economy continued its strong expansion in fy14 with real gdp growing by 10. Thirty years later, resistance, radical movements and dissent were to rock the foundation of his fragile new society into revolution. An empirical result from the study reveals that there is a short run significant impact of remittances on economic growth while it affect the economy negatively in the long run. The gross domestic product gdp in ethiopia expanded 9 percent in 2018 from the previous year.
An assessment of the ethiopian labor market concept note. The structure and performance of ethiopias financial sector 5 clearly there is evolving structural shift when deposit is observed by institutions. In 2018, the share of agriculture in ethiopias gross domestic product was 31. Significant poverty reduction by melkamu selam 021814 under a policy of agriculture development led industrialization, as a central element in ethiopias economic development framework, the countrys agriculture sector has. The impact of human capital development on economic growth. Efforts such as this, complemented by continued economic growth have reportedly decreased poverty levels to 29%, down from 60% around 20 years ago. Ethiopia gdp annual growth rate 19812018 data 2019.
Ethiopias main challenges are sustaining its positive economic growth and accelerating poverty reduction, which both require significant progress in job creation as well as improved governance. The average growth rate of the gdp was stated to be 10. Economic reform incorporating private sector is expected to help the economy grow faster. Ethiopia economy in the 1980s and framework for accelerated. The relationship between economic growth and environmental quality is the object of wide debate. World bank lauds ethiopias economic growth in a report. Although data showing healthy export growth points to a good start to fiscal year 2019a2020 july 2019july 2020, the outbreak of coronavirus will be taking a heavy toll on the economy. Economic growth greatly intensified since 2005 at slightly above 10% per annum in the ensuing 10 years, allowing per capita gdp to grow at nearly 8% annually. A read is counted each time someone views a publication summary such as the title, abstract, and list of authors, clicks on a figure, or views or downloads the fulltext. Stock market performance and economic growth empirical. The african development bank group chief economist complex. A socioeconomic study haradhan kumar mohajan accepted 15 october, 20 ethiopia is considered to be one of the oldest nations in the world but at present its socio economic condition is not satisfactory. As a federal country, the functions and duties of the government are divided between central and state governments and they are generally defined in the constitution. Ethiopias african tiger leaps towards middle income.
Oct 22, 2014 despite some dispute over the figures, there is consensus that ethiopia has registered impressive economic growth for the past decade of somewhere between 8% and 10%. Pdf causal relationship between government revenue growth. The manufacturing sectors growth rate more than doubled from 1. Economic growth and development in ethiopia from tutor2u subscribe to email updates from tutor2u economics join s of fellow economics teachers and students all getting the tutor2u economics teams latest resources and support delivered fresh in their inbox every morning. The composition of ethiopias labor force provides some insights into the growthemployment story. Can it adapt to climate change and build a green economy.
In the last three years of the growth and transformation plan gtp period, the economy has registered robust growth. The impact of trade liberalization on the ethiopias trade. Ethiopia economic growth and development economics tutor2u. Economic growth and poverty in ethiopia economic growth refers to an increase in the national income or per capita income 2. Ethiopias growth miracle, coupled with its large population and significant land mass, has attracted.
The country has undertaken serious trade reforms, either as a part of major macroeconomic reforms and commitments with international regulations, or by decisions driven by a process of internal adjustment for the last two decades. Stock market performance and economic growth empirical evidence from kenya using causality test approach tobias o. Ethiopian economic growth compared to sub saharan africa. It is based on the information available at the time it was completed on september 5, 2014. The relationship between inflation, money supply and. The government is implementing the second phase of its growth and transformation plan gtp ii which will run to 201920. Farmers have reacquired the economic freedom of price, of production, and of settlement. The good news from ethiopia, and what might make it even better what economic growth means in ethiopia and how britain and ethiopia can work togther on the issue. Finally, the article concludes with suggestions to. This procedure is usually referred to as growth accounting. The report examines the causes of low growth, identifying the respective roles of structural, institutional and policy factors. When the funny price control for 17 items passed i wrote, what does beer have to do with food price. In 2006, 2010 and 20, the average ssa countries annual economic growth was 6.
Sectoral economic growth and structural transformation in. We believe ethiopia economic growth is a good indication to address some of the remedies we wrote above. In general the trend is to move away form a dominant public sector towards a financial structure where the role of the. Ethiopias economic system include coffee, livestock products leather, live animals, and meat, fruits, vegetables, flowers, etc. In 20, the economic growth recorded in ethiopia was 9. Pdf determinant of economic growth in case of ethiopia. The public sector represents 20 percent of total urban employment, and its share has been rising steadily for the last few decades. Relative to its neighbors, ethiopias economic performance was mixed. Learn more about the ethiopia economy, including the population of ethiopia, gdp, facts, trade, business, inflation and other data and analysis on its economy from the index of economic freedom. Co integration and causality analysis fitsum sharew denbel, yilkal wassie ayen and teshome adugna regasa phd senior expert, ethiopian shipping and logistics service enterprise, addis ababa ethiopia. Rising instability in ethiopia could impact markets. With recent increases in gdp and ppp and other indicators the ethiopian economy is showing signs of growth.
Growth will remain high in the short term while gradually declining in the medium term. The countrys climate resilient green economy strategy crge pdf, which. Policies have the potential to alter not just the rate of economic growth, but also the structural character of that growth. The relationship between inflation, money supply and economic. Ethiopian airlines the leading airline group in africa. Ethiopia is one of the few countries to have formally merged its aims of. Ethiopias steady economic growth leads to poverty reduction. It seeks to answer the question what proportion of recorded economic growth can be attributed to growth in the capital stock, growth of the labor force and changes in overall efficiency.
Economic development shows the change in economic growth and at the same time change in the living standard of the people. Olweny1 and danson kimani2 abstract this study investigates the causal relationship between stock market performance and economic growth in kenya for the period 20012010, using quarterly secondary data. For a background history of the environment economic growth debate and genesis of the ekc, see for instance, soumyananda 2004. That is why i recommended the prime minster to fire his economic adviser. We first examined the effects of real effective exchange rate, foreign debt, government expenditure, and inflation on foreign direct investment. Using multivariate regression we tested the impact of investment on economic growth in the country from 199293 to 200506.
Average annual real gdp growth rate for the last decade. Current situation and challenges page 2 percent in average change of 0. The agriculture, industry and service sectors annual average growth was 9. The relationship between infrastructure development and economic growth is investigated for ethiopia during the period 197475201415. Selection of key themes for ethiopia developmental state via 5 year plans rapid industrialisation strategy key role of logistics infrastructure in growth building tourism around ethiopian airlines fragile state political unrest emergency rule o. Maintaining a growth rate in agricultural gdp of six percent would provide enough employment growth to contribute to rapid economic transformation of the economy and rapid decline in poverty. Energy and economic growth lignite category with relatively low heating value, often as low as 1,000 to 2,000 kcalkg. At the very center of this discussion stands the concept of the environmental kuznets curve ekc. Finally, the article concludes with suggestions to improve ethiopian merger regulation. The government is devoting a high share of its budget to propoor programs and investments. Ethiopia has experienced rapid economic growth since 2005, with gross domestic product gdp growing at an average rate of 10. Economic development ethiopia issues, growth, economic. The economic history of modern ethiopia has not attracted sufficient scholarly. Economic growth, as proposed by neoclassical growth models, can be measured as the average annual change in the natural logarithm of gdp per person.
The ethiopian government has developed comprehensive agricultural and economic development plans that have contributed to the countrys substantial growth in agriculture, industry and services. Aim to be a global lightmanufacturing hub building a climate resilient green economy aim to become a net exporter of energy ultimate goal is to push ethiopia into. Growth should benefit from the homegrown economic reform program, which seeks to address macroeconomic imbalances and unlock structural. Growth was driven mainly by the services sector from the supply side and public investment from the demand side. Growth and development in ethiopia economics tutor2u.
Ethiopia economy in the 1980s and framework for accelerated growth english abstract. High growth and lower oil prices will drive further reductions in poverty. The impact of human capital development on economic growth in. There has also been tremendous growth in the number, diversity and market share of private businesses in the ethiopian economy. Growth and transformation plan gtp 201011201415 draft. Introduction the last decade has been an extraordinarily good one for developing countries and their mostly poor citizensso good in fact that it has become commonplace to look upon them as potential saviors of the world economy. Public employment growth has been especially rapid at local levels doubling since 1992, as shown in figure 1. Determinant of economic growth in case of ethiopia. This page provides ethiopia gdp annual growth rate actual values, historical data, forecast, chart, statistics, economic. Higher economic growth brought with it positive trends in poverty reduction in both urban and rural areas. But for the years 2016 and 2017, growth will be lower 8 % in 2016 and 7. This study examines the impact of trade liberalization on the ethiopias trade balance using the data over the period 1974 to 2009 from nbe national bank of ethiopia. These forecasts were revised upwards by the imf, which estimated that growth would not exceed 7 % in these years.
This economic growth was higher than the average ssa economic growth. Economic growth brought with it positive trends in reducing poverty, in both urban and rural areas. Ethiopia is a fascinating country to use as a case study in economic growth and development according to a recent editorial in the financial times, ethiopia has transformed in 20 years from a famineravaged nation into a destination for savvy and wellknown private equity groups such as kkr. Economic growth, development and poverty in ethiopia. Policies have the potential to alter not just the rate of economic. An economic history of modern ethiopia shiferaw bekele.
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